In 2013, Time Warner, the large media company, filed a brief urging the United States Supreme Court to rule against the online company Aereo, which was redistributing broadcast channels over the Internet.
The so-called amicus, or friend of the court, brief was filed to support ABC, a unit of Disney, which had brought a copyright violation case against Aereo on behalf of the broadcasters.
What was not known at the time was that the chief justice was a shareholder of Time Warner. According to a disclosure form released earlier this month, Justice Roberts owned as much as $500,000 of Time Warner stock.
It wasn’t the only time Justice Roberts ruled on a case in which an amicus brief was filed by a company in which he owned a stake. According to his disclosure forms, he also owned shares in Hewlett- Packard — up to $50,000 worth — when he ruled in a patent case in favor of Teva Pharmaceutical; Hewlett-Packard had filed an amicus brief in support of Teva. EMC, a major Internet technology firm, also filed an amicus brief to support Teva; Justice Stephen G. Breyer owned up to $100,000 worth of shares in EMC, according to disclosure forms.
At a time when the public has increasingly lost faith in Washington and our judicial system, rulings by justices with a potential financial interest in the outcome of the cases raise new questions about the credibility of the court.
The justices didn’t do anything illegal. Judges are allowed, perhaps surprisingly to some, to own individual stocks. The law actually allows federal judges to rule on cases in which they have a stake in a company that files an amicus brief. The briefs are generally submitted by entities that would benefit in some way from the outcome of a case and are trying to influence the court’s decision.
Federal judges must recuse themselves because of a financial interest if they own a stake directly in a company that is the plaintiff or the defendant in a case before the court.
A nonprofit organization called Fix the Court, which is pushing to have Supreme Court justices put their holdings in a blind trust, has tracked the relationship between the justices’ votes and their financial stakes in companies that have filed amicus briefs.
In 2014, Justice Roberts, Justice Breyer and Justice Samuel A. Alito Jr. ruled on five cases in which they owned shares in companies that filed amicus briefs. In all five cases, the justices ruled in favor of the company filing the brief in which they had a financial interest, according to Fix the Court.
From 2009 through 2013, they ruled that way 68 percent of the time — or in 19 cases.
It appears that only Justices Roberts, Breyer and Alito own substantial stakes in individual stocks. The other justices, according to their disclosures, have investments in mutual funds and other instruments that would not be as likely to be affected by a particular ruling.
Of course, it is impossible to know whether a justice’s decision has been influenced by personal financial interest in an amicus brief filer. And in some cases, it is not always clear that a ruling supporting an amicus brief filer would directly benefit that filer’s stock in the immediate term.
What makes it so difficult to fully ascribe a financial motive to a particular ruling is embodied in the vote by Justice Breyer in a patent case between Nautilus, an exercise equipment maker, and Biosig Instruments, which owned a patent for a heart rate monitoring system.
Cisco Systems and Nokia, among other companies, filed amicus briefs — Cisco on behalf of Nautilus and Nokia on behalf of Biosig. Justice Breyer owned shares in both. He ruled in favor of Nautilus, which won the case 9 to 0. (He sold his position in Nokia, worth up to $50,000, days after the court delivered its opinion.)
A spokeswoman for the Supreme Court did not respond to multiple emails seeking comment.
The seeming solution to the perception of a conflict of interest might appear simple enough: The justices should recuse themselves from cases in which they have a financial stake in any party to the suit.
But that answer creates its own unintended consequences. Legal experts worry that if justices were to recuse themselves from all such cases, companies might perversely seek to manipulate the court by filing amicus briefs in hopes of removing an unsupportive justice with a stake in the outcome from the vote.
That leads to the solution proposed by Gabe Roth, the founder of Fix the Court. Mr. Roth has advocated justices’ holding individual stocks in a blind trust controlled by a third party. Such an answer would prevent the perception of any conflict of interest.
“There is no way to prove the conflict is real,” Mr. Roth said. “But it is the appearance of impropriety that is the problem.”
Members of Congress are allowed to own shares of individual stocks, but after an outcry in 2012, Congress passed the Stock Act, requiring members and certain federal agency officials to disclose their securities transactions within 45 days of a purchase or sale. Before passage of the law, Congress had to disclose ownership records only once a year. Justices also are required to disclose their stakes only annually.
It wouldn’t necessarily require congressional action for the Supreme Court to adopt a blind trust policy. It is possible for the justices to adopt such a policy on their own. There is precedent: In 1993, the justices signed a recusal policy on their own that governed when they would recuse themselves from cases in which a relative was involved as a lawyer.
Given the questions that stock ownership raises, why not end them with a blind trust?